Have you “Prospered” after one year?

The startup person-to-person lending outfit Prosper.com is already one year old. Jonathan, over at MyMoneyBlog has recently done a very good two-part review [Part1] [Part2] of Prosper.com.

At the present moment, I still have one outstanding loan of around $73 at Prosper, which thankfully the borrower has been paying dutifully to this date. However, lenders on the whole did not do well at all. According to Jonathan’s estimates, if a lender were to diversify across loans of different profiles, the returns over the year would have been a measly 2% on average. That’s right, only 2% whereas you can get 5% to 6% from a FDIC-insured savings account from a bank, with no / little withdrawal limitations.

Personally, I would have to agree with his conclusions :

However, I am personally not interested. Given the returns information so far, I’d much rather stay with stocks. Prosper simply doesn’t tickle my fancy, I feel it’s far too much work and every time I’d see a late payment I’d just get annoyed.

I am glad that I “came to my senses” and did not invest any further in the Prosper system after my initial trial of two loans last year.

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